Category Archives: Strategy

Everything that surrounds us was once a dream that someone made real. What do we call the people who turn such dreams into reality? Leaders.

When we bought our house, our lawyer found an old envelope in the conveyancing paperwork. In it was an ordnance survey map of the local area. On the map, someone had drawn a small block and an ‘X’, in pencil, in a field, by a farm lane. In the margin, they had written a word: “Ellendene”.

In 1938, the original owners had marked where they would build their house. They imagined it enough to give it a name.

It had been their dream. Someone made it real. And now, after many years, their dream was now our house.

All houses were once dreams. Not all of them have such stories, but for every house ever built, someone had to imagine what it would be.

Then someone had to build it and turn this dream into reality.

For every house, someone did.

It’s not just houses.

Unless we are standing naked in the wilderness (and, perhaps, even then) everything about us was once someone’s dream.

A little while ago – 1988, according to the OED – people started using the word ‘metrics’ in the way we use it today. Businesses took up the term, motivated by a belief that they needed to measure things if they were to manage business performance.

Of course, businesses have always measured what they do. But the advent of lean thinking, global competition and, most of all, the growing adoption of computers and spreadsheets all about this time meant that an organisation that lacked firm control of their business would be (and were) killed off by competitors who had learned to run tighter ships.

So, metrics.

And since then? On the back of Kaplan and Norton’s balanced scorecard (a good thing), Key Performance Indicators (KPIs*) (via Mack Hanan in 1970), Statistical Process Control (SPC) (also a good thing), Six Sigma (a good thing in the right place), Management Information Systems (MIS), Business Intelligence (BI), data analytics, dashboards and now, Big Data, metrics have become an industry. Many businesses employ phalanxes of analysts and banks of computers to ‘crunch the numbers’.

Now in many organisations, the first response to a proposal to do something new or better is “…how will you measure it?” (And not, you’ll notice, “…why do we want to do this?”)

This is a shame.

In business, the things we do, we do because they are important and will make a difference: to our organisation, to our customers, to our people. What we want to achieve, the value we are aiming to get, is much more important than how we choose to measure it.

Yet too many organisations put the metrics cart before the value horse.

Important things get slowed down – or stopped – because we can’t agree on what metrics to use, or we need to wait to set up a reporting mechanism, or we are waiting for our technical people to “…set up the system” so it can measure and report.

The effect is that important things get lost, or are delayed, and the cost of doing business goes up.

Worse, we end up delivering projects that meet their metrics but miss their goal.

In extreme cases, metrics can become a madness that infects almost every business conversation. I once found myself working in an organisation that had 43,000 metrics in place.

Yes, they had the madness so badly that they had measured their metrics.

*Sigh*

Yet here’s the thing. The purpose of metrics isn’t to measure something. Their purpose is to give decision-makers a way to pay attention to something important in our business, over time.

But people can only pay attention to about seven things at a time. Any organisation has a core of a few things to which it needs to pay attention just to keep things going. Money, for example, or customers, or the amount of work we need to do, or quality, or risk.

If we can only pay attention to seven things, we have only a little room to pay attention to anything else: the things we need to change or make better. We need to pick these things to which we want to pay attention very carefully if we want them to succeed. They need to be important.

And if we have to pick our way through hundreds or thousands of metrics, then we can’t focus on these one or two important things. Or if, by some monumental effort of concentration, we can focus on these one or two things, we can only do so for a moment, before we are distracted by something else.

This is one reason why so many important initiatives hit the sand; why ‘Top Management attention’ is so transitory; why we lose sight of our goals in the middle of projects – because too many things are competing for corporate attention.

This is not to say that we don’t need metrics. On the contrary, having the right metrics against good standards with effective, practical and timely mechanisms for reporting them, is more of an imperative than ever. The argument for keeping tight control of business essentials is much stronger now than it ever was in 1988.

We have to begin the conversation about metrics differently. Perhaps we should start by asking what do we need to pay attention to, and why do we need to do so? If we can only play attention to seven things, what are the seven in which we want to invest our time and attention?

The dirty little secret of metrics is this: if they don’t help us to pay attention to the things that are important, then they are a distraction, and are stopping us from running our business properly.

For the key to getting things done in business isn’t to measure things – it is to pay attention to them.

So does this justify the reported $125bn (or $50.1bn) (or $17bn) which is forecast to be spent on Big Data in 2015? Perhaps, but I doubt it.

I remember another time when data promised us a brave new world. In the olden days of the mid-nineties, the story, cited by sources such as the Financial Times, was how analysis of shopping baskets for a mid-range US store on Friday nights showed a previously unknown correlation between buying beer and buying diapers. This story and others like it made the idea of data mining credible as it promised a whole new world of customer insight and understanding.

The beer/diaper story, it turns out, wasn’t true, but it didn’t stop the stampede.

Companies spent fortunes on things called data warehouses, invested in stuff called knowledge management and we were all supposed to make lots of money by having greater insight into customer behaviour.

Consultants, vendors and the media who were all beating the data mining drum.

The consultants, who told us that this was the next big thing and that we would go out of business without it.

The vendors, who sold us the kit and the software and the maintenance contracts and the patches and who told us that the issue we were complaining about “…was a known bug that would be fixed in the next release…”.

The journalists and the advertisers, who sold ad space and wrote articles about “Making the case for knowledge management” and held conferences with titles like “Data Warehousing: A strategic imperative” or some such.

So we went to the conferences and read the articles and called in the consultants and bought the kit and installed the software and did the management of change and ran the benefits realisation exercises and employed new people with strange job titles and tried, as the dust settled, to see the step change in performance promised to us.

While the drum-majors walked away to do the same thing again with new clients.

Result? Billions of dollars siphoned out from the pockets of companies who were doing real things for customers and into the coffers of these drum-beating companies.

At the time, I recall that the consultants, tech companies and media companies in this space all posting phenomenal revenues.

What I don’t recall is reading so much about the great profits their clients made from all this knowledge management and data mining.

As far as I can tell, the promise of data mining and knowledge management was a promise unkept.

And now we have Big Data.

Perhaps Big Deja Vu might be a better term, because it all sounds very familiar.

The scale, depth, density and timeliness of customer data available to us is magnitudes greater than ever before. Mobile data, geolocation, behavioural antecedents, digital payments, social media and evolution of the web are streets ahead of the consumer purchasing information upon which the promise of data warehousing used to rely.

I just feel we need to think harder about how we want to take advantage of it. The same people are beating the drum and more and more companies are falling into step.

But the drum beat isn’t our drum beat. It’s the beat of market hype, of technologists seeking a market, of consultants seeking The Next Big Thing.

It’s not the drum beat of the customer.

What customer insight are we missing? Why does it matter? What could we do better for customers if we had it?

And (this is the kicker) what difference will it make? Really?

If we are to avoid being vendor victims, we should begin – as always – with the customer. And if we can answer these questions properly, then perhaps Big Data may really be of value to customers and to the companies that sell to them – and not just to those who are selling tickets to the Big Data bandwagon.

We were snowbound at a corporate retreat in Princeton, New Jersey. We had exhausted the formal agenda and were waiting to hear if the snowploughs had freed the I-95 so that we could get to the airport and go home.

So we were having a few beers and having a general discussion about what works for us in business when Kevin, an experienced colleague who worked in our manufacturing practice, said something so true and so simple that it has stuck with me at every step of my career since.

We were talking about creating and keeping customer relationships, and he said: “Every time I’m going to meet someone for business, before I go in, I ask myself, ‘how can I create value for them in this meeting?’ If I can do this, I know they’ll want to meet me again. They’ll learn to trust me. And, when the time is right, they’ll buy from me.”

The snowploughs came and we put down our beers and caught our planes home, but his simple mantra – ‘how can I create value for my customers each time we meet?’ – has served me well since then.

Because this is the secret of customer experience.

If we want to make the customer experience better, it’s simple. We make every customer encounter something that our customer values. Then we repeat for every step of the encounter.

Offering control to our customer (of the conversation, of the transaction)

Making it so that there is only one way for the customer to do something – and it’s always good

Being patient

Making it easy to pay

Making it easy to get money back

Pricing fairly

Being consistent

Making it easy to talk to a person (if that is what our customer wants)

Making it easy not to have to talk to a person (if that is what our customer wants)

Making it easy for the customer to change their mind

Welcoming returns with a smile

Improvising if the customer needs it

Anticipating their questions (nicely)

Listening to them. REALLY listening. (Note: this one is hard).

Being honest

If we can’t do it, saying so

If someone else can do it better or cheaper, saying so

Pricing things in ways that are clear and easy to understand

No surprises – being up front with bad news and what we are doing to fix it

If there is a quick or cheap fix for their problem, solving it for them

Refusing to sell them the wrong thing

Keeping our promises, no matter how small (especially the small ones)

Being interesting

Being funny (but not offensive)

Speak about their problems more than our solutions

Helping

Explaining what is happening and what will happen next

Putting ourselves in their shoes

Giving them meaningful choices

Tailoring what we do to what they want

Keeping their anonymity (if that is what they want)

Reassuring them

Taking responsibility for sorting things out, even if it is not our fault

Solving their problems quickly and consistently

Giving them something

Offering something extra (a lagniappe, for example)

Giving away insight or knowledge because the customer needs help

Letting them take the credit

Giving them things because we think they might like them

Making it cheaper because they’ve come back

Accepting that if they have got things wrong, it’s our fault for allowing it to happen

Speed

Being fast

Being instant

Letting them be slow. Waiting for them. Patiently. And with a smile.

Being convenient in ways that matter to them

Asking them how quickly they want it and getting it to them whenever they say

Each of these will make the customer experience better. Better, customers will value dealing with us. And if there’s value, they’ll be willing to buy from us. And they’ll want to do it again. And this is the bottom-line reason why customer experience matters.

You can’t control the customer experience.

You can’t control customers’ feelings, or their personal circumstances, or how much attention they are going to pay to you. Their experience of your brand, or your product, or your service is down to how they feel. And you can’t control their feelings.

But you can make it better

You can control how you maximise the chances that the experience is positive.

Here are ten examples of what I mean, described, of course, from the customer’s perspective. If you make any of these better, your typical customer’s experience will improve.

You’re quick.Waiting is a cost to me, the customer. It’s a cost that I don’t want to incur. Whatever I want, I want it now. The more you can get me what I want straightaway, the more I like it. (Delay also makes it more likely that things will go wrong, and I don’t like that).

You are easy to deal with. Whatever I want to do is so easy I don’t have to think about it. I get the information or the product or the service or the support I want in the ways that I want it.

You get it right. What you sell me is what I want. And what I want is what I get. And it doesn’t go wrong.

You care if something isn’t right. If it does go wrong, I want you to know before I do. I want you to fix it with no inconvenience on my part. And I want you to put right anything that went bad because your product went wrong, before I have to ask.

You prove that I can trust you. I want to know, before I buy, that I can trust you. You give me value anytime I engage with you, whether I am buying from you or not. If every encounter with you provides insight, advice or help in ways that matter to me, then I’ll trust you with my money when it’s time to buy.

You trust me.You don’t behave as if I am a thief or a fraudster. You acknowledge, listen and act on what I tell you. If you need to do things to make things secure, you explain why and you do your best to make it easy and trouble-free. You take my side.

You are honest about what you can’t do. If you can’t help me then you let me know so I don’t waste time or have incorrect expectations. And then you help me in whatever way you can.

You act in my interests. If something is better for me than what you are offering or what I am requesting, you let me know and you help me with it.

Improve any one of these things and you will make the customer experience better. In addition, you will cut your costs of sale and service and make your people happier. Improve all ten, and the experience you offer may well become the stuff of legend.

(I wrote this and then discovered Seth Godin’s wonderful post: Your call is very important to us which covers related ground, but with added goodness (I love the idea of routing delayed calls to the CEO’s spouse…) Enjoy).

Here’s the thing: I hate to be helped in shops. I don’t like it when an assistant approaches and asks “Can I help you?” That’s just me. Maybe it’s because I live in England. I want to make up my own mind and seek help from an assistant when I want it.

My friend, on the other hand, likes an assistant to help him. He resents it when he sees staff standing around, not offering to help. He wants them to come up and ask.

What’s a shop to do? The customer experience they offer is damned if they do and damned if they don’t.

Many companies try to please everyone. They try to cover all the bases. They attempt to offer an experience that handles their main set of target customers and the others, the exceptions. Result? The experience they offer is confusing. They serve neither set of customers well and both groups of customers become unhappy and leave.

In our businesses we want to avoid this. We must analyse customer data to get insight into what matters to our target customers. We must combine this insight with our own understanding of what we are good at, to think about the experience we want to offer.

Then we must choose to provide the experience that works best for the customers we want to get and keep.

When we do, we know that such an experience won’t work for all customers. But we accept this because we will be confident that it will work for the majority of those we want to serve.

The customers we lose are the price we pay to enable us to offer a great experience for our target market. Why is it worth paying?

Because if we can truly offer a great experience for their target market, then we have a real edge over the competition. We will secure a greater market share. And we can seek higher margins as our customers accept that higher value justifies higher prices.

Even better, we save money. We won’t waste time, resources and attention on exceptions and variations for customers whom we are not targeting and from whom we will get little return.

Of course, the bright reader (and all my readers are bright) will have spotted what has happened here. The quality of customer experience we offer corresponds directly with the quality of our business strategy.

If we have made clear strategic choices about the customers we want to serve, we can confidently provide an experience that they will value.

If our strategy is unclear? Then we can only offer a confused or ambiguous customer experience.

So yes, our customer experience is damned. But it can happen in two ways. It can be damned because we choose to serve our target customers brilliantly and with confidence because we know who they are. By doing so, we are willing to accept that some current customers won’t value the experience we offer and may leave. And we accept this cost, because the payoff for our core customers – and for us – is so great.

In this case, our customer experience is a clear expression of our organisation’s strategic intent.

But the second path to damnation is far, far worse. It happens when we try to please everyone, because we don’t know (or are unwilling to choose) which customers we want to serve. Then we can’t offer a winning customer experience because we have to compromise to try to keep everyone happy.

In this case, the customer experience we offer is equally an expression of our organisation’s strategic intent. But what it expresses is ambiguity and confusion.

Keeping everyone happy may be a good intention, but it is also the road to Hell.

So maybe we have to accept that our customer experience is damned. But let’s choose how we want it to happen. For when we do, we give ourselves a chance to give our customers an experience that will make a real difference to them and to us.

David Wall’s face is set almost in a pout and his hair – well, it would do well in American Hustle.

But I am a sucker for excellence. It grew on me. I noticed the precision that the sculptor used. I started to look at the figure of the dancer himself.

The sculpture, magically, captures the dancer in the air. His leading foot turns, just so, to maximise extension and clarity of line. His rear foot also turns, but differently.

His fingers, at the end of his immaculately extended arm, are all where they need to be. His trailing hand makes the line of his leap perfect.

This figure in metal, like, I imagine, the figure in the flesh, transforms from something lumpen and heavy to something free, elegant and apparently effortless.

Which, I know, is the exact opposite of the truth.

EVERYTHING about this leap is deliberate. The turn of the ankle, the angle of the leg, even the spacing between the fingers.

Everything.

Deliberate effortlessness like this is only possible through untold hours of training, development of technique, feedback and coaching, just to produce an instant in the air which, were it not been captured in sculpture, might go unnoticed.

The purpose is not just to make the leap, but to strive to make it perfect, even if the only person who knows that it is perfect is the dancer himself.

This is, I suppose, what art means: to conceive of what might be right and then set oneself to achieve the impossible standards that it demands.

And the same applies to business. The best businesses, the ones we love, the ones we welcome into our lives, exist because the people behind them want to do something, to achieve something, to make a difference.

The money they make is a side-effect. They make money because they are doing the right things. Because they (and their customers) in what they do. They believe that taking infinite pains to get things right; taking deliberate care about every last detail; and striving for a vision that has meaning, are things worth doing in themselves.

But, like an artist who prostitutes himself for money, as soon as a company forgets this, its art suffers.

I was once asked by the CEO of a multi-national tech company what I thought might be the difference between a ‘good’ company and a ‘bad’ one. I said that I thought I could see one core difference. A ‘good’ company’s primary concern is its business and how it can do better; a ‘bad’ company’s primary concerns are ‘the numbers’ and how it can make them better.

Customers don’t buy numbers. They don’t experience numbers. They don’t want numbers. They want the stuff that a company does that solves their problems, gives them value and makes them feel good.

My months of walking past Enzo Plazzotta’s sculpture have taught me something about business. The simple delivery of business, doing it better and making some cash – this is the craft of business. But striving to create and run a business which customers enjoy, which employees want to drive to greater heights and which makes a genuine difference to people’s lives – this is the art of business. This makes being in business worthwhile.

It’s open to all of us. If we can conceive of greatness, if we take deliberate pains to get it right, and if we set and meet impossible standards, then we too might create something wonderful.

I believe that, if it wants to, any business can achieve wonder. Can make customers want to be part of their adventure. Can have their people achieve amazing things just to be able to say, “…we did that”. Can have customers enjoy, and value, what they buy.

This is why I spend my time with organisations to make the customer experience better. Because it is at the point when customers experience what we say and what we do, that, perhaps, we make masterpieces.